Loonie boosted by Buffett offer

TORONTO (Reuters) - The Canadian dollar rose against the
U.S. dollar on Tuesday, helped by an announcement by
billionaire investor Warren Buffett that Berkshire Hathaway had
offered to assume the liabilities of the monoline bond
insurers, injecting some calm into frazzled financial markets.

Domestic bond prices, with no major domestic data to
influence direction, fell on Buffett's announcement.

At 9:26 a.m. EST, the Canadian dollar was at US$1.0044,
making a greenback worth 99.56 Canadian cents, up from 99.85
U.S. cents, valuing a U.S. dollar at C$1.0015, at Monday's
close.

"This could be seen as a very positive development," said
Matthew Strauss, senior currency strategist at RBC Capital
Markets.

"If we see another strong rally from this point forward, I
think it would favor the Canadian dollar."

Despite several recent pieces of domestic data that came in
above market expectations, the outlook for the Canadian economy
has been hurt by the prospects for growth south of the border.

Exports contribute around 40 percent to the Canadian
economy and the United States takes in around three-quarters of
Canadian exports.

The main concern in financial markets as of late has been
the health of U.S. bond insurers, which guarantee over $2.4
trillion of debt.
Continued...